Immigration NZ broke, new Minister says

New Zealand's immigration system “lacks integrity” and is so financially hamstrung it can’t investigate fraud and exploitation cases, its new Minister says. Shane Cowlishaw speaks to Iain Lees-Galloway about his challenging role ahead.

There’s always a honeymoon period for any new Government, and Iain Lees-Galloway is clearly still enjoying his - even though he says he has inherited an under-funded system failing to deal with widespread immigration fraud and exploitation of migrants.

He pops out to his office’s reception to provide a warm welcome, as he enthusiastically relays how exhausting the new job is and how pleased he was with how he handled his first question from the Opposition in the House. He doubts they will be asking another any time soon.

The Palmerston North MP is now a Cabinet Minister after nine years on those Opposition benches.

Holding the portfolios of immigration, ACC, and workplace relations and safety, he has already been in the media spotlight with the latter as the Government pushes through an extension to paid parental leave under urgency. But, while all three areas will be busy, it is likely to be immigration that becomes his most difficult, and contentious, job.

Before the election campaign, New Zealand’s record net migration levels were a hot topic.

The previous Government was reluctant to change much but took to tinkering around the edges with the introduction of new salary bands for skilled migrants.

At the other end of the spectrum New Zealand First leader Winston Peters was calling for a drop from the then-record level of 72,000 arrivals a year to 10,000.

For several months Labour deflected calls for it to reveal its plans in the area, before finally revealing proposals that fell somewhere in the middle. Removing the work rights for students during and after study was one of the linchpins, along with regionalising the work visa skills shortage lists.

The party estimated that its proposals would reduce net migration by between 20,000 and 30,000 per year.

That figure constantly came back to dog Labour and continues to do so even now.

"It would have been ludicrous to stand up in front of a media pack and say we’re going to make all these changes but we don’t know what the impact of it all will be.”

But Lees-Galloway regrets nothing.

“I don’t regret it at all, because we knew we were going to be asked by the media. The media were always going to ask and I don’t begrudge them that, it’s a perfectly legitimate question to ask - ‘What’s the impact of your policy?’.

“We needed to be able to demonstrate we’d done some thinking about that. It would have been ludicrous to stand up in front of a media pack and say we’re going to make all these changes but we don’t know what the impact of it all will be.”

Alongside trimming the numbers, another priority for the new Minister is reducing migrant exploitation.

It will be a challenge.

Lack of enforcement

New Zealand’s immigration system is soft, and people know it, Lees-Galloway says.

He says he was shocked to discover how little fraud and migrant exploitation was being investigated.

In a briefing he received as incoming minister, he was told that in 2015/2016 Immigration New Zealand (INZ) only had the capacity to investigate a third of cases that met its criteria.

But in 2016/17 that number plunged to just 18 percent after the number of reported cases almost doubled.

Over the past five months, the number of cases continued to skyrocket, Lees-Galloway says.

“That is allowing a whole lot of bad behaviour to carry on and the result of that is you’ve got undetected migrant exploitation, you’ve got a visa system that lacks integrity.”

He says the problem is a simple one: money, or lack of it.

In 2015 the total immigration budget was $235 million, rising to $262m in 2016 and $295m this year.

But there has been no increase in INZ’s capacity to investigate these cases, and dodgy employers know it. This has led to a lack of faith with the system and people treating the system with disdain because they know they can get away with it, Lees-Galloway says.

“That is allowing a whole lot of bad behaviour to carry on and the result of that is you’ve got undetected migrant exploitation, you’ve got a visa system that lacks integrity.”

Fixing things will not be straightforward, he claims.

He says new Ministers across the board are discovering similar fiscal problems and are in the process of looking at areas where money can be shifted from one department to another.

“I’m going to have to have some very frank conversations with the Minister of Finance but unfortunately all of us are finding this in all of our portfolios, we have huge unallocated capital spend, promises made by the previous Government that they just didn’t set aside any money for.

“We’ve got a real challenge on our hands to, first of all, follow through on what the previous Government said they were going to do...and also making the improvements that we know need to make.”

Visas locked to the regions

If Lees-Galloway thinks finding extra money for INZ will be challenging, then diverting people away from Auckland will be even more so.

More than half of new arrivals head to our biggest city, leaving its infrastructure groaning under the pressure.

The most recent immigration figures show a slight softening of net migration to 70,700, but Lees-Galloway says he will be pushing forward with all of Labour’s pre-election policies.

He’s also reviewing the previous Government’s most recent changes that he was unenthusiastic about, including the salary bands and the three-year limit for those that don’t reach them.

To get more skilled migration to the regions he will develop, if Cabinet agrees, a localised skill shortage list, likely at a Regional Council level.

This list would have a lower threshold than the national list, allowing individual regions to attract workers in specific industries.

“We’d say ‘Right, if you’ve come to New Zealand and you’ve got a temporary visa by virtue of having a skill that is needed in Southland then your visa is valid as long as you live and work in Southland’. That should hopefully take some pressure off Auckland and also help the regions get the people they need.”

“What’s happening is people are continuously rolling over their visa, staying in New Zealand for nine, ten, eleven years or more with no pathway to residency which is unreasonable ..."

Lees-Galloway believes that too many people with low-skills are currently being allowed in under the ANZSCO (Australian and New Zealand Standard Classification of Occupations) system - something he describes as “not great, but all we’ve got” - but he is sympathetic to the plight of at least one industry.

The aged care sector has waived a red flag, warning of the potential damage from immigration changes for an industry reliant on migrant labour.

With one estimate putting the demand in the growing sector at an extra 10,000 jobs a year, Lees-Galloway admits that it will likely need to still rely to some extent on foreign labour.

While the wage boost from the Equal Pay Act could attract more New Zealanders, he says that if an industry can prove it has a programme to encourage locals into the industry and provide them with a career path but still can’t find the workers, then it will be allowed to source some from overseas.

For those that do arrive in New Zealand with the desired skills, they could find a different pathway to residency than a continuous temporary visa roll-over - something Lees Galloway wants to fix.

“The previous Government decided to deal with that by saying 'after three years you leave'. That’s dumb, it’s a bit blunt in my mind.

“What’s happening is people are continuously rolling over their visa, staying in New Zealand for nine, ten, eleven years or more with no pathway to residency which is unreasonable to the person because if you’ve been here for ten years then maybe we do need your skill.”

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